I thought the deal with Tengen was that they weren't paying Nintendo any licensing fees while releasing games for the NES. That would be the equivalent of breaking the copy protection on a PS2, XBox, or GCube game, pressing your own games complete with the protection scheme in place, and not bothering to pay Sony, Microsoft, or Nintendo the required licensing fee.
Hmmm... On that note, since Sega Dreamcast (or 3DO or Sega CD or...) does not have any protection to prevent regular discs from reading, would it then be considered legal to produce games for the system without licensing? Probably not, as you would still be required to license out the development kit... Hmmm... Now my brain is swimming...............................................